Question

An insured couple owns a pontoon boat. Which situation would NOT be covered by their watercraft endorsement under their homeowners policy?

1) The boat is damaged in a storm while docked at the insured couple's private residence.
2) The boat is stolen from a marina while the insured couple is on vacation.
3) The insured couple gets into an accident while operating the boat and causes damage to another person's property.
4) The boat is used for commercial purposes and the insured couple receives financial compensation.

Answer 1

The situation that would NOT be covered by the watercraft endorsement under their homeowners policy is when the boat is used for commercial purposes and the insured couple receives financial compensation.

Step-by-step explanation:

The situation that would NOT be covered by the watercraft endorsement under their homeowners policy is when the boat is used for commercial purposes and the insured couple receives financial compensation (Option 4).

The watercraft endorsement typically covers damages or theft of the boat, as well as any liability the insured couple may have if they cause damage to someone else's property while operating the boat. However, using the boat for commercial purposes is considered a higher risk and requires separate insurance coverage.

Therefore, the correct answer is Option 4.